1-1 By: Cain S.B. No. 911
1-2 (In the Senate - Filed March 4, 1997; March 6, 1997, read
1-3 first time and referred to Committee on Jurisprudence;
1-4 March 26, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0; March 26, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 911 By: Cain
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the protection or release of a trustee from liability
1-11 under certain circumstances.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 114.001, Property Code, is amended by
1-14 adding Subsection (e) to read as follows:
1-15 (e) The trustee has the same protection from liability
1-16 provided for a fiduciary under 42 U.S.C. Section 9607(n).
1-17 SECTION 2. Section 114.005, Property Code, is amended to
1-18 read as follows:
1-19 Sec. 114.005. RELEASE OF LIABILITY BY BENEFICIARY. (a) A
1-20 beneficiary who has full legal capacity and is acting on full
1-21 information may relieve a trustee from any duty, responsibility,
1-22 restriction, or liability as to the beneficiary that would
1-23 otherwise be imposed on the trustee by this subtitle, including
1-24 liability for past violations, except as to the duties,
1-25 restrictions, and liabilities imposed on corporate trustees by
1-26 Section 113.052 or 113.053 [of this subtitle].
1-27 (b) A beneficiary who has full legal capacity and is acting
1-28 on full information may release a trustee from liability for an
1-29 investment made or recommended by an agent retained by the trustee
1-30 for that purpose, including an agent who is an affiliate of the
1-31 trustee and whose employment is determined by the beneficiary to be
1-32 beneficial to the trust. The release is also a release as to a
1-33 minor or unborn or unascertained person who is not otherwise
1-34 represented to the extent that the person's interest is adequately
1-35 represented by another party with a substantially identical
1-36 interest in the trust estate.
1-37 (c) A [The] release under this section must be in writing
1-38 and delivered to the trustee.
1-39 (d) A beneficiary is not precluded from bringing an action
1-40 for breach of contract against an agent whose conduct is the basis
1-41 of a release under Subsection (b). In that action, the conduct of
1-42 the agent shall be judged on the basis of the standard for trust
1-43 management and investment prescribed by Section 113.056(a).
1-44 (e) In this section, "affiliate" has the meaning assigned by
1-45 Section 111.004.
1-46 SECTION 3. This Act takes effect September 1, 1997.
1-47 SECTION 4. The importance of this legislation and the
1-48 crowded condition of the calendars in both houses create an
1-49 emergency and an imperative public necessity that the
1-50 constitutional rule requiring bills to be read on three several
1-51 days in each house be suspended, and this rule is hereby suspended.
1-52 * * * * *